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Britain's FTSE fractionally higher before UK budget
[LONDON] UK shares hovered just in positive territory on Tuesday as sterling fell ahead of Britain's budget statement due later in the day, with strong updates from smaller firms boosting the mid caps.
The blue chip FTSE 100 index was up just over 3 points at 7,432.55 by 1044 GMT after suffering a four-day losing streak, as sterling hit a seven-week low and a rally among mining stocks lent support.
While share price moves among the large caps were relatively muted, Worldpay advanced 2.7 per cent after JPMorgan raised its target price on the stock.
Insurer Legal & General, however, declined 1.1 per cent after reporting results.
Among mid caps, Restaurant Group jumped 8.7 per cent, set for its best day in 5 months after the firm said that it has put a brake on expansion plans until it is sure that its brand and location strategy is 'sufficiently robust'.
Inmarsat rallied 6.3 per cent after results, and security firm G4S gained 6.3 per cent after reporting its first rise in revenue in four years.
Crematorium operator Dignity was the biggest faller, slumping 12.5 per cent after cutting guidance. The stock was set to post its biggest one-day loss on record.
The FTSE 250 index was up 0.1 per cent.
All eyes were also on Britain's government budget, due later in the day, which will be first full statement since the Brexit vote to leave the European Union last year.
Finance minister Philip Hammond will say he will not relax his grip on the public purse despite a resilient economy as the divorce talks loom.
"Although the Chancellor is likely to express confidence about the UK economy's ability to navigate the next two years as the exit from the EU is negotiated, it is clear that there are risks of a more turbulent environment," analysts at UBS said in a note.
"Indeed, we believe there have recently been some early, tentative signs that momentum may already be starting to fade slightly," UBS analysts added.
Though markets sold off in the immediate aftermath of the June 24 referendum vote, the FTSE 100 is up around 27 per cent since a low hit that day, while the mid caps have gained around 24 per cent.